A brand new month means we will see the major central banks update their monetary policies!
The Reserve Bank of Australia (RBA) will have the ball rolling on Tuesday at 4:30am GMT.
Will the decision help extend the upside of AUD/USD this week?
AUD/USD 15-minute forex Planned by TV
In case you missed it, AUD/USD has been making higher highs and higher lows since Thursday when the pair found support from the 0.600 psychological area.
AUD/USD is now trading near the 0.640 area, which corresponds to the Pivot Point line today.
More importantly, its current levels are also near the trend line and support of the 100 SMA on the 15-minute time frame.
Can AUD/USD Extend Its Short Term Uptrend?
It will likely depend on the RBA’s decision.
Markets see the central bank holding rates steady at 4.10% after surprising markets with a 25bp rate hike in May and June.
but.
Some traders believe that Governor Lowe and his gang can raise interest rates last 25 bps to 4.35%.
For one thing, June’s statement said:Further tightening of monetary policy may be required,Something that was also present in the May statement before the RBA surprised us with a rate hike in June.
Leading indicators such as the S&P manufacturing PMI, MI inflation expectations, and the unemployment rate suggest that the economy could take at least one more rate hike.
If the RBA surprises us with another 25 basis point hike, AUD/USD could jump off the trend line support levels.
AUD/USD could rally to previous highs of 0.6670 and even try to reach R1 (.6680) before sellers step in.
If you are not sure about buying AUD/USD, you can also wait for the actual event and trade the actual issue.
If the RBA decides to hold rates at 4.10% instead, you can use the broken trendline support for a breakout and retest case before targeting previous lows such as S1 (.6620) or .6600.
Whatever bias you end up trading, remember to win during the Asian trading session or the London session to make sure you don’t get knocked out by other market catalysts!
This content is for informational purposes only and does not constitute investment advice. Trading in any financial market involves risks. Please read our Risk Disclosure Statement to ensure you understand the risks involved.